Overview of work by OECD-NEA-NDD on “A Review of Nuclear New … · 2015-02-06 · Overview of...

Overview of work by OECD-NEA-NDD ony“A Review of Nuclear New Build in Relation to

Project Structure, Supply Chain and Financing”j , pp y g

KDI International Seminar, 21 January 2015

Geoffrey ROTHWELL, PhD Organisation for Economic Cooperation and Development (OECD)

Nuclear Energy Agency (NEA)Nuclear Development Division (NDD)

© 2014 Organisation for Economic Co-operation and Development

121/1/2015

REVIEW OF NUCLEAR NEW BUILD:REVIEW OF NUCLEAR NEW BUILD:PROJECT STRUCTURE, SUPPLY

CHAIN AND FINANCING

(draft dated 05 JAN 2015)

Jan Horst Keppler and Marco ComettoJan Horst Keppler and Marco ComettoNEA, Nuclear Development Division


221/1/2015

REVIEW OF NUCLEAR NEW BUILD:

PROJECT STRUCTURE, SUPPLY CHAIN AND FINANCING

Current Table of Contents

Part I: Solutions for Electricity Price Stability and Financial Risk1. Value of Price Stability for Nuclear Energy2. Risk Exposure of Different Investor Groupsp p3. Case Studies on Akkuyu, Barakah, and Vogtle

P t II P j t M t d th S l Ch i d i C t tiPart II: Project Management and the Supply Chain during Construction1. Overview of Number, Size and Status of Different Nuclear New Build Projects 2. Vertical Integration, Design Certification and Competition3 Th E l i St t f th Gl b l N l S l Ch i 3. The Evolving Structure of the Global Nuclear Supply Chain 4. Divergence between Actual and Estimated Costs in Large Industrial Projects5. Case Studies on Shimane, Summer, Tianwan, and Flamanville+Taishan


321/1/2015

Reactors under Construction, IAEA PRIS (2014)


421/1/2015

The Nuclear New Build PuzzleKPMG at OECD/NEA Workshop (19 SEPT 2013)p ( )

Regulatory Construction Operation 4

Regulatory framework

Construction contracts

pcontracts

Grid connections/

external infrastructure

Fundingand

financing

Market consider-

ations

12

infrastructure g

3Waste and de-commissioning

Fuel supplyagreementsSupply chain

3


521/1/2015

NPP Overnight and Levelized Cost of ElectricityIEA/NEA (2010 currently being updated)IEA/NEA (2010, currently being updated)


621/1/2015

NPP Construction Cost Breakdown FP & L e s ti m ate o f T w i n Un i t AB W R i n 2 0 0 7 U S $ ba s e d on T V A (2 0 0 5 )

p.2 4 8 i n h ttp://w w w .ps c.s ta te .fl .u s /l i brary /f i l i n g s /0 7 /0 94 6 7 -0 7 /0 9 4 6 7 -0 7 .pdfM W e (g ro s s ) pe r u n i t x tw o u n i ts 2 7 4 2M W e (g ro s s ) pe r u n i t x tw o u n i ts 2 ,7 4 2M W e (n e t) pe r u n i t x tw o u n i ts 2 ,6 6 0

M i l l i on s $ /k W eC o s t C a te g o ry IS IC IS IC C o de D e s cri pti o n N A IC S EM W G /G IF 2 0 0 7$ * (n e t) %R e a ctor P l a n t Equ i pm e n t 25 1 3 M a n u . o f s te a m g e n e ra to rs 3 3 2 4 1 0 2 20 $ 1 ,60 9 $ 6 0 5 1 7 .4 %T u rbi n e P l a n t Equ i pm e n t 28 1 1 M a n u . o f e n g i n e s an d tu rbi n e s 3 3 3 6 1 1 2 3 0 -2 3 3 -2 34 $ 1 ,07 4 $ 4 0 4 1 1 .6 %El e ctri c P l a n t Equ i pm e n t 27 1 0 M a n u . o f e l e ctr i c ... g e n e ra to rs , tra n s fo rm e rs , e tc . 3 3 5 3 1 0 2 4 0 -2 4 1 -2 42 $ 47 5 $ 1 7 9 5 .1 %M i s c. P l a n t Equ i pm e n t 28 1 0 M a n u . o f g e n e ra l -pu rpo s e m a ch i n e ry 3 3 3 9 0 0 2 60 $ 16 8 $ 6 3 1 .8 %S w i tch Y a rd 27 1 0 M a n u . o f e l e ctr i c ... g e n e ra to rs , tra n s fo rm e rs , e tc . 4 2 3 6 1 0 2 4 1 + 2 42 $ 10 7 $ 4 0 1 .2 %F u e l 20 1 1 M a n u . o f ba s i c ch e m i ca l s 3 2 5 1 8 0 5 50 $5 2 $ 1 9 0 .6 %C i rc. W a te r P u m ps & P i pe 28 1 3 M a n u . o f o th e r pu m ps ? a n d va l ve s 3 3 3 9 1 1 2 5 0 -2 51 $3 0 $ 1 1 0 .3 %A u x B o i l e rs 25 1 2 M a n u . o f ta n k s , re s e rvo i rs a n d co n ta i n e rs 3 3 2 4 1 0 2 34 $1 8 $ 7 0 .2 %

O w n e r T ra n s i ti on 35 1 0 El e ctri c po w e r g e n tra n s a n d di s tr i bu ti o n 2 2 1 1 1 3 3 40 $ 22 1 $ 8 3 2 4 %O w n e r T ra n s i ti on 35 1 0 El e ctri c po w e r g e n ., tra n s . a n d di s tr i bu ti o n 2 2 1 1 1 3 3 40 $ 22 1 $ 8 3 2 .4 %C o o l i n g T o w e rs 33 2 0 In s ta l l a t i o n o f i n du s tri a l m a ch i n e ry a n d e qu i p. 2 3 8 2 2 0 2 51 $ 15 1 $ 5 7 1 .6 %M ai n C o n d. H e a t R e je ct S y s . 33 2 0 In s ta l l a t i o n o f i n du s tri a l m a ch i n e ry a n d e qu i p. 2 3 8 2 2 0 2 33 $9 7 $ 3 6 1 .0 %O th e r O w n e r C o s ts 35 1 0 El e ctri c po w e r g e n ., tra n s . a n d di s tr i bu ti o n 2 2 1 1 1 3 4 00 $4 4 $ 1 6 0 .5 %La n d C o s ts - O ffs i te 35 1 0 El e ctri c po w e r g e n ., tra n s . a n d di s tr i bu ti o n 2 2 1 1 1 3 1 10 $ 0 $ 0 0 .0 %La n d C o s ts - S i te 35 1 0 El e ctri c po w e r g e n ., tra n s . a n d di s tr i bu ti o n 2 2 1 1 1 3 1 10 $ 0 $ 0 0 .0 %

C o n s tru cti on La bo r, M an u a l 42 2 0 C o n s tru ct i o n o f u t i l i ty pro je cts 2 3 7 1 3 0 D i re ct L $ 1 ,63 5 $ 6 1 5 1 7 .6 %S tru ctu re & Im pro ve m e n ts 42 2 0 C o n s tru ct i o n o f u t i l i ty pro je cts 2 3 7 1 3 0 2 1 0 -2 1 1 -2 14 $ 91 1 $ 3 4 2 9 .8 %S i te w o rk 42 2 0 C o n s tru ct i o n o f u t i l i ty pro je cts 2 3 7 1 3 0 2 11 $ 29 6 $ 1 1 1 3 .2 %S e cu ri ty In fra s tru ctu re 42 2 0 C o n s tru ct i o n o f u t i l i ty pro je cts 2 3 7 1 3 0 2 14 $ 12 5 $ 4 7 1 .4 %A ddi ti o n a l R e qu i re d S co pe 42 2 0 C o n s tru ct i o n o f u t i l i ty pro je cts 2 3 7 1 3 0 5 0 0 -5 50 $ 11 3 $ 4 2 1 .2 %

E i H O ffi S i 71 1 0 A h i t t l d i i t i i t i ? 5 4 1 3 3 0 3 5 0 + 3 70 $ 95 9 $ 3 6 1 1 0 3 %En g i n e e rs H o m e O ffi ce S e rvi ce s 71 1 0 A rch i te ctu ra l a n d e n g i n e e ri n g a ct i vi t i e s ? 5 4 1 3 3 0 3 5 0 + 3 70 $ 95 9 $ 3 6 1 1 0 .3 %C o n s tru cti on S e rvi ce s 71 1 0 A rch i te ctu ra l a n d e n g i n e e ri n g a ct i vi t i e s ? 5 4 1 3 3 0 3 1 0 + 3 20 $ 61 4 $ 2 3 1 6 .6 %O w n e r P ro je ct M a n a g e m e n t 71 1 0 A rch i te ctu ra l a n d e n g i n e e ri n g a ct i vi t i e s ? 5 4 1 3 3 0 3 6 0 + 3 80 $ 19 1 $ 7 2 2 .1 %EP C s ta rtu p co s ts 71 1 0 A rch i te ctu ra l a n d e n g i n e e ri n g a ct i vi t i e s ? 5 4 1 3 3 0 3 30 $ 16 0 $ 6 0 1 .7 %

P e rm i ts /Li ce n s i n g 84 1 3 R e g u l a t i o n ? o f bu s i n e s s e s 9 2 6 1 3 0 1 0 0 -1 10 $ 12 0 $ 4 5 1 .3 %S i te S e cu ri ty 80 1 0 P ri va te s e cu ri ty a cti vi ti e s 5 6 1 6 1 2 In di re ct L $ 10 5 $ 3 9 1 .1 %


721/1/2015

y yT o ta l O ve rn i g h t * In cl u de s con t i n g e n cy $ 9 ,27 2 $3 ,4 8 6 1 0 0 %

Translating Industrial Classification Systems

To convert the ISIC codes to NAISC codes, see “Correspondence between NAICS 2012 and ISIC Rev.4,” http://unstats.un.org/unsd/cr/registry/regso.asp?Ci=75&Lg=1&Co=&Thttp://unstats.un.org/unsd/cr/registry/regso.asp?Ci 75&Lg 1&Co &T=0&p=1

To convert the NAICS codes to IMPLAN codes, see “440 IMPLAN from ,NAICs lookup” at https://implan.com/index.php?view=document&alias=152-440-implan-from-naics-lookup&category_slug=2007-to-current-implan-supplemental-files&layout=default&option=com_docman&Itemid=1480

To convert the NAICS codes to REMI codes, see “REMI Industries for v.9 Models” at http://www.remi.com/download/documentation/pi+/policy_insight_version_9.0/NAICS_Industries_for_REMI-Hierarchical_v9.pdf


821/1/2015


921/1/2015

Time Schedule for the Akkuyu NPP


1021/1/2015

Capital Expenditure (CAPEX) Profile for Akkuyu NPP:

4 1,200 MWe Units = $20B


1121/1/2015

Time is Money!

$6 000

$6,500

$7,000

Overnight Cost + IDC + Inflation + Real Escalation = +40%+

$5,000

$5,500

$6,000

ost/

kW

e

O i ht C t C t t 2011 $

Overnight Cost + IDC = +20%

Overnight Cost + IDC + Inflation = +30%+

$3,500

$4,000

$4,500

tru

ctio

n C

o Overnight Cost Constant 2011 $

$2 000

$2,500

$3,000

Con

st

$2,000

0 10 20 30 40 50 60

M onths


1221/1/2015

Construction Lead Times, IAEA PRIS (2014)


1321/1/2015

Construction Lead Times of French N4 andGerman Konvoi IAEA PRIS (2014)German Konvoi, IAEA PRIS (2014)


1421/1/2015

Construction Lead Times of Korean NPPsIAEA PRIS (2014)IAEA PRIS (2014)


1521/1/2015

Construction and Supply Chain Risk–>Construction Delay Risk –>

Fi i l Ri k Financial Risk

The electricity purchasing agreement will not be adjusted t fl t t ti l t d i t ti to reflect potential cost overruns during construction or changes in the financial conditions for the Akkuyu Nuclear Joint Stock Company (JSC).

In this respect construction, supply chain and financial risk are borne almost exclusively by the Akkuyu Nuclear JSC.y y y J

However, it should be noted that the financial risk is minimised in the case of the Akkuyu project, since the minimised in the case of the Akkuyu project, since the companies participating Akkuyu Nuclear JSC are state-owned.


1621/1/2015

Babcock & Wilcox

1980s 1990s 2000s

Consolidation in Nuclear Steam Supply System Supply Chain

Framatome

Siemens

Mitsubishi Heavy Industries

FramatomeFramatome ANP AREVA

Mitsubishi HI

Collaboration agreement

Combustion Engineering

Asea

Brown Boveri

ABB

BNFL

Toshiba WestinghouseWestinghouse

Toshiba

Hitachi

Toshiba Westinghouse

Hitachi GE

GE

Hanjung

Skoda

Doosan Heavy IndustryDoosan Group

Atomic Energy of Canada

Zarubezhatomenergostroy

Candu Energy

Atomenergoprom


1721/1/2015

Atomenergoprom

Structure of the U.S Nuclear Power: Sh f N l S S l S S liShares of Nuclear Steam Supply System Suppliers

NSSS Supplier NSSS 1965 1975 1985 1995 2005 2015NSSS Supplier NSSS 1965 1975 1985 1995 2005 2015Westinghouse WEST 44.8% 44.6% 48.2% 47.9% 47.9% 51.7%General Electric GE 35.9% 34.5% 31.4% 32.4% 32.7% 32.0%Combustion Engineering CE 0.0% 11.4% 13.6% 13.9% 13.5% 11.3%g gBabcock & Wilcox B&W 9.8% 9.0% 6.5% 5.8% 6.0% 5.1%General Atomics GA 1.5% 0.4% 0.3% 0.0% 0.0% 0.0%Allis Chalmers AC 4.9% 0.1% 0.0% 0.0% 0.0% 0.0%U it d E i UEC 2 5% 0 0% 0 0% 0 0% 0 0% 0 0%United Engineers UEC 2.5% 0.0% 0.0% 0.0% 0.0% 0.0%General Nuclear Enginee GNE 0.6% 0.0% 0.0% 0.0% 0.0% 0.0%Megawatts of Capacity TOTAL 2,634 84,148 104,313 101,364 98,274 98,789HHI 3 425 3 400 3 525 3 575 3 575 3 850HHI 3,425 3,400 3,525 3,575 3,575 3,850

The Herfindahl-Hirschman Index (HHI) measures the degree of concentration in an industry


1821/1/2015

the degree of concentration in an industry.

Construction Supply Chain Contracting: Arthur D. Little (2014)

htt // dlittl /d l d /t dl t /ADL N l N B ild U il d dfhttp://www.adlittle.com/downloads/tx_adlreports/ADL_Nuclear_New_Build_Unveiled.pdf

NB: Experience is defined by new build projects completed: No: No new build experience until now. Low: Only new builds with operating before 2002. M d t O t it t t d i th l t t Moderate: One or two units started in the last ten years. High: Three or more units implemented in the recent past.


1921/1/2015

Vertical Integration versus External Contracting Application of Williamson (1975) to NPP New Build

ASSET SPECIFICITY

Low Medium High

LowSpot market provision

(Building services)

LT Outsourcing/Tender

(Construction of headquarters)

Joint venture

(Building of power plant in specific country)

RE

QU

EN

CY

MediumSpot market provision

(IT Supplies)


(NPP Maintenance)


(Provision of specialised valves and pumps)

FR

HighLT Outsourcing/Tender

(Payroll management)

Vertical Integration

(Human resource management)

Vertical Integration

(Fabrication of reactor vessel)


2021/1/2015

P j t M t C St diProject Management Case Studies

1. KEPCO’s APR-1400

1 Barakah (UAE) 1. Barakah (UAE)

2. Toshiba/Westinghouse’s AP1000

1. Vogtle (US)

2. Summer (US)

3. GE/Hitachi’s ABWR at

1. Shimane 3 (Japan)

2. Kashiwazaki Kariwa 6&7 (Japan)

4. AREVA’s EPR

1 Flamanville (France)1. Flamanville (France)

2. Taishan (China)

3. Hinkley Point C (UK)

5. Rosatom’s VVER

1. Tianwan (China)

2. Akkuyu (Turkey)


2121/1/2015

1.1 KEPCO’s APR-1400 at Barakah, UAE

http://www.uaeinteract.com/arabic/news/default.asp?ID=380


2221/1/2015

p p

1.1 Korean Consortium Members in the UAE Tender

Scope Firms Price (USD billion)

Construction/Management

NSSS, Steam generator &other major components

Doosan (with Toshiba as a STG supplier) 3.9

Civil engineering Hyundai (prime constructor)and Samsung

3.1 and 2.5

Technical assistance and license Westinghouse 1.3

Eng. procurement and construction (EPC)

KEPCO/KHNP unknown

Training Training of UAE staff KHNP, KAIST unknown

Design Plant Design and Modification KOPEC unknownDesign Plant Design and Modification KOPEC unknown

NPP launch and first two fuel loads

Nuclear fuel (2 loads) KNF 1

Initial O&M KHNP & KPS 1.2

Cost of capital Project financing KEPCO unknownp j g

Source: Berthelemy and Leveque, “Korea Nuclear Options,” CERNA, Ecole des Mines, Paris (April 2011).


2321/1/2015

2.2 Aerial View of VC Summer


2421/1/2015

2.2 Global Supply Chain for VC Summer


2521/1/2015

2.2 Global Supply Chain for VC Summer, 2

Component Location Continent

Condenser Sacheon, ROK Asia

Containment Vessel Sacheon, ROK Asia

Heat Exchangers Ansan City, ROK Asia

Component Location Continent

Integrated Head Blackfoot, ID NAmerica

Liquid ring Vacuum Pump Pittsburgh, PA NAmerica

Pumps Brea, CA NAmericaHeat Exchangers Ansan City, ROK Asia

Reactor Vessel Changwon, ROK Asia

Steam Generators (SGs) Changwon, ROK Asia

Transformers Tokyo, JP Asia

Turbine Generator Tokyo, JP Asia

Pumps Brea, CA NAmerica

Reactor Coolant Pumps Cheswick, PA NAmerica

Recirculation Heaters Pittsburgh, PA NAmerica

Reactor Vessel Flow skirt York, PA NAmerica

Selonoid Values Pittsburgh, PA NAmerica

Valves Cheonan, ROK Asia

Containment Recirc. Screens Winterthur, CH Europe

Pressurizer San Giorgo, IT Europe

Reactor Coolant Loop Piping Milan, IT Europe

"AP1000 Modules" Lake Charles, LA NAmerica

Separators Neenah, WI NAmerica

SG Recirc. and Drain Pumps Colchester, VT NAmerica

Squib Valves McKean, PA NAmerica

Tank Demineralizers Detroit, MI NAmerica

Valves Bolingbrook, IL NAmericaAP1000 Modules Lake Charles, LA NAmerica

Air Operated Pump Mansfield, OH NAmerica

Aux. Relief Values Brantford, ON NAmerica

Control Rod Drive Mech. Newington, NH NAmerica

Cranes Shoreview, MN NAmerica

Valves Bolingbrook, IL NAmerica

Valves Rancho St. Marg., CA NAmerica

Valves Ipswich, MA NAmerica

Variable Freq. Drives New Kensington, PA NAmerica

Cooling Tower Fans Sao Paulo, BR SAmerica

Instrumentation Valves Solon, OH NAmerica


2621/1/2015

3.2 GE/Hitachi’s ABWR at Kashiwazaki-Kariwa 6&7


2721/1/2015

4.1 AREVA’s EPRs at Olkiluoto, Flamanville, & Taishan

Flamanville-3: start 12-2007

Taishan 1: start 11-2009

Okkiluoto-3: start 8-2005

Taishan 2: start 4-2010


2821/1/2015

4.1 Flamanville 3 Project Organization Chart

S


2921/1/2015

Sources: EDF

5.1 Rosatom’s VVER at Tianwan

Unit Reactor type Netcapacity

Grosscapacity

Constructionstarted

Commercialoperation

Tianwan-1 VVER-1000/428 (AES-91) 990 MW 1,060

MW October 1999 May 2007

Tianwan-2 VVER-1000/428 (AES-91) 990 MW 1,060

MW October 2000 August 2007

Tianwan-3 VVER-1000/428M (AES-91) 1,050 MW 1,126

MW December 2012 2018

Tianwan-4 VVER-1000/428M (AES 91) 1,050 MW 1,126

MWSeptember 2013 2019


3021/1/2015

Tianwan 4 (AES-91) 1,050 MW MW 2013 2019

S R lt f C St di P j t M tSummary Results of Case Studies on Project Management• KEPCO’s APR-1400 at Barakah (UAE) o Integrated Korean supplies (with Westinghouse) with many years of working together in Korea

Emirates Nuclear Corporation (ENEC) equity with Korean Export Import Bank (Kexim) debto Emirates Nuclear Corporation (ENEC) equity with Korean Export-Import Bank (Kexim) debt

• Toshiba/Westinghouse’s AP1000 at Vogtle (US) and Summer (US)o Strong state regulatory support, trust between regulator and project management teamo Modular constructiono Modular constructiono Flexibility and contingency planning

• GE/Hitachi’s ABWR at Shimane 3 (Japan) and Kashiwazaki 6&7 (Japan)o Dedicated feedback from Kashiwazaki-Kariwa 6&7o Dedicated feedback from Kashiwazaki-Kariwa 6&7o Standardizationo Advanced technologies in construction and project management

• AREVA’s EPR at Flamanville (France) –Taishan (China) – Hinkley Point C (UK)o Modifications to simplify EPR design and improve construction methodso Complete 3D mock up to manage the entire layout (civil, piping, cabling, ducts...)o Simulator for validation of process and documentation, factory surveillance of manufacturingo Early involvement of local companies and the recruitment of local workerso Early involvement of local companies and the recruitment of local workers

• Rosatom’s VVER at Tianwan (China) and Akkuyu (Turkey)o Carefully planned integration of domestic workforceso Training at reference plant


3121/1/2015

o g e e e ce p

L L d d P li C l iLessons Learned and Policy ConclusionsPART I

1 Market design technology choices and carbon emissions from the power 1. Market design, technology choices and carbon emissions from the power sector are intrinsically linked.

2. The greater long-term electricity revenue risk, the greater the bias against high capital cost technologies such as nuclear; capital-intensive technologies high capital cost technologies such as nuclear; capital intensive technologies are instead less affected by short-term volatility.

3. The more stable electricity prices and output, the more stable NPVs, the lower are interest rates and the more competitive is nuclear.p

4. Risks for bondholders and share holders are not symmetrical; even with high leverage nuclear projects pose limited risks to bondholders; loan guarantees provide protection during construction.

PART II

1. Advance the convergence and standardisation of engineering codes and quality standards in the global nuclear industry.quality standards in the global nuclear industry.

2. Introduce explicit change management to find balance between prescriptive approach and flexibility.

3 Leadership team building incentives and trust are key elements


3221/1/2015

3. Leadership, team building, incentives and trust are key elements.

Date post:	25-Apr-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Overview of work by OECD-NEA-NDD on “A Review of Nuclear New … · 2015-02-06 · Overview of...

Documents